Friday, January 17, 2014

Blomkest Fertilizer, Inc. v. Postash Corp. of Saskatchewan, Inc. case brief notes

Blomkest Fertilizer, Inc. v. Postash Corp. of Saskatchewan, Inc. case brief notes

Plus Factor:
Evidence For
Evidence Against
Communication:
  • Periodic price verification calls - (high level executive calls beginning 1987)
  • Solicitations
  • Calls were subsequent to the price increase
  • Calls infrequent, sporadic
No legit justification:
  • Price was not the projected price expected based upon the Suspension Agreement
  • No justification for the price verification calls
  • Alternative explanation based upon the Suspension Agreement
  • Privatization of PCS explains change in behavior
Irrational w/o Agreement:
  • "market correction" program that lowers prices to deter "cheating"

Market Structure:
  • Oligopoly
  • Fungible product (potash)
  • Inelastic demand? Was there evidence of this?
  • Barriers to entry (again, was there evidence?)
  • Industry excess capacity
  • Cartel is not inevitable in oligopoly
  • Industry excess capacity



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